Advice and Resources for the Biotech Industry

Advice and Resources for the Biotech Industry

I was recently contacted by outside counsel for a large biopharma company about doing some consulting work for them. We discussed the general scope of the project by phone, and quickly reached agreement that I would be able to help them with their task. The next step was to sign a consulting agreement, which was par for the course. When I was emailed the form I was pleasantly surprised to see that the agreement was only one and half pages long. Many of the consulting contracts I’ve signed for other organizations are typically eight to ten pages. They force me to carefully step through a minefield of minutiae to ensure that the agreement is fairly written for both parties. This one, I thought, would be easy to review and sign.

Anyone who’s ever tried to access the scientific literature knows that science journals are incredibly expensive. Subscriptions often cost hundreds, if not thousands of dollars per journal title. Purchasing individual papers online (often at $30 to $35 apiece) is equally problematic; I’ve estimated that about three quarters of articles in the scientific literature are secured behind paywalls. Ironically, one of the articles I wrote about the problem of unaffordable science journals is now sequestered behind the Nature Biotechnology paywall (it was originally freely available). The high cost of journals hinders access by both lay people as well as physicians and many scientists (mostly those outside of academia). The unaffordability of science journals serves as an impediment to the success of small biotechnology companies. It makes it difficult for the scientists who work there to keep current with the latest developments in their fields. It’s hard to be competitive as an R&D organization when you can’t afford access to the key papers that may steer your research one way or another. Equally troubling is the other side of the coin: rising costs (to the authors) for publishing papers. These can now exceed $5,000 for some open access journals (in which those who submit the articles pay a fee, rather than the end users), and costs have been rising at a pace much higher than the overall inflation rate.

When I was diagnosed with cancer last year, I was glad that I had good health insurance coverage. I hadn’t realized it at the time, but I now know that I really had nothing to worry about. It turns out that having insurance is not really all that important for our health and well-being. I know this because Congressman Raul Labrador (R-Idaho) told us so. As he put it, “Nobody dies because they don’t have access to health care.” That might be true on some planet, but not on this one. Politifact, which identified a number of studies that showed having health insurance indeed prevents people from dying, later rated this ridiculous claim as “Pants on Fire.”

Many people know that an eternal link exists between science and music. For example, Russian composer Alexander Borodin was as well known for his chemical work on aldehydes as his symphonies and string quartets. Many scientists have side careers, or at least hobbies, as musicians. These include NIH Director Francis Collins, who has entertained many people with his singing and guitar playing (note the inlaid mother-of-pearl double helix on the guitar’s fretboard).

What you may have missed is that many rock musicians, who’ve long been associated with illicit drug abuse, clearly envisioned numerous modern pharmaceutical innovations in their songs. I’m not talking about overt drug tracks like J.J. Cale’s Cocaine (popularized by Eric Clapton), the Beatles Doctor Robert, or the Rolling Stones’ Mother’s Little Helper. I’m talkin’ tunes that predated and anticipated later medicinal developments, as reflected in their lyrics. Let me share a few examples.

It’s time once again for my annual roundup of some of the best books I've read this year. As usual, my focus is on non-fiction tales from the world of science, medicine, and technology. A master list of all books that I recommend can be found here, and you can also check out my previous book recommendations from 2016 and 2015. Here's my latest list:

With this historic event only a week behind us, it’s going to take time to figure out if the March for Science accomplished anything significant. Part of this is due to the fact that its stated goals were rather diffuse. Data, of course, needs to be collected, sorted, and analyzed, which will happen because the March was studied by a slew of sociologists. Turnouts at the more than 600 marches worldwide were high, with enthusiastic crowds displaying a diverse cornucopia of signs and slogans not usually paraded about in public. As far as I can tell, the marches were uniformly peaceful affairs, with no counter protesters demonstrating in favor of “alternative facts.” I also saw a number of people sharing religious points of view, happily conveying their opinions that one can believe in both God and science. There was even a group of Satanists marching; I didn’t know until visiting their website that they, too, take a pro-science stance.

If you haven’t heard yet, there's going to be a nationwide March for Science on Earth Day, April 22nd. This includes a primary March in Washington, DC, as well as “sister” marches around the globe (at least 320 cities have already signed up). I’m planning on marching here in Seattle, and I’m writing this to encourage others to participate in whichever March is most convenient for you to attend. The March for Science is being supported by a number of prominent organizations, including the American Association for the Advancement of Science, the Union of Concerned Scientists, and the NY Academy of Sciences. Not all scientists think the March will be helpful (and some have voiced that it could even be harmful), but I’m not in that camp for the reasons I’ve outlined below.

When you hear the word “blockbuster”, what’s the first thing that comes to your mind?a) A movie that earns hundreds of millions of dollars at the box officeb) A prescription drug that brings in more than $1 billion a year in salesc) A bankrupt chain of video storesd) A large bomb capable of destroying an entire city block

All four of these choices are valid answers, but the focus of this article is on the first two. The parallels between biopharma and Hollywood are strong. Both industries invest huge amounts of money in a large number of projects with the hope that some will turn out to be blockbusters i.e. massive money making machines. Sometimes it works out, but the failure rate is high, with most drugs (and many movies) never recouping their development costs. Both groups also love to develop sequels, which is a simpler strategy than developing riskier independent products that their fickle public may, or may not, embrace.There are many aspects of their businesses that are shared by the pharmaceutical and movie industries. Let’s see how they compare:

In my previous post, I detailed numerous similarities between the pharmaceutical and film industries. Now it’s time to point out the substantial differences between these two businesses that illustrate their different economic consumption and pricing models. Production Costs - Big Barriers to Entry in Pharma, but Not FilmNobody’s producing drugs in their basement that are going to earn them a ton of money. Okay, let me rephrase that. Nobody’s producing legal pharmaceuticals in their basement that are going to earn them big bucks. Creating prescription drugs is a very expensive enterprise. The cost of bringing a new drug to market has been estimated by the Tufts Center for the Study of Drug Development to be about $2.6 billion. That’s a huge hurdle to making money. There’s no getting around extensive research, filing multiple patents, complicated manufacturing steps, expensive clinical trials, and detailed regulatory and FDA filing requirements. How long might it take just to recoup those costs? Let’s return to my previously cited example of a very poor selling drug. Seattle’s CTI BioPharma sold only $3.47 M of their non-Hodgkin disease/B-cell lymphoma drug Pixuvri worldwide in 2015 (all sales were in Europe). If it cost the company the current industry “average” of $2.6 billion to develop it (which it didn’t), it would take about 749 years just to recoup that money, based on 2015 revenues. And that’s without showing a profit. It’s a pretty safe bet this drug will never recapture its development costs no matter what they were.

Here’s a novel way to lower health care costs: make the US government a purveyor of drugs. In a recent article in Forbes, Peter Bach and Mark Trusheim suggested that the US government could reduce drug costs by buying Gilead and distributing its hepatitis C medicines at a greatly discounted price. The idea, on the face of it, is an interesting one to consider. In their scenario, the government buys Gilead for a 30 percent premium on its current stock price, spending $156 billion. The government would then sell off the R&D operations as well as a strong franchise of HIV drugs, reducing the “net cost” down to $77 billion. Other financial adjustments reduce the price further, lowering the cost to treat each patient down to $15,733 from what they claim is the current cost of $42,000. This represents a pretty nice cost savings when spread out over a patient population of 3.2 million people (including about one out of every three people in prison). Gilead’s hepatitis drugs certainly rank at or near the very top of innovative medicines coming out of biopharma in the last 25 years. However, the Forbes article did not delve into some of the far-reaching ramifications of what government buyouts might mean to other players. Let’s take a deeper look below the surface to see what such a buyout might portend.

Science is a search for truth. I work in the biosciences, where it’s all about understanding the mysteries of life. Our days are built around generating hypotheses and then working to accumulate sufficient data to either prove or disprove them. As scientists, we enjoy problem solving and finding out new things, both expected and unexpected. Our careers are (or should be) built around always doing something novel, because once something hidden is revealed, it’s time to move on to tackling the next riddle. Some of us relish a focus on basic science, while others work in the realm of innovating practical applications for what we (and others) have discovered. One could hardly ask for a more rewarding vocation than that.

Baby Boomers know that Superman, the world’s most famous superhero,“…fights a never-ending battle for truth, justice, and the American way!” These words opened the 1950’s Adventures of Superman TV series that ran from 1952-1958. The introduction on the 1940’s radio series of the same name, however, was a bit different, “Superman–defender of law and order, champion of equal rights, valiant, courageous fighter against the forces of hate and prejudice, who….fights a never-ending battle for truth and justice.” The words, “the American way” were added to this phrase as part of the animated Fleischer Studios Superman serials in 1942, when the U.S. was deeply embroiled in WWII. The three extra words were dropped from the radio broadcasts when the war ended, but were revived in the TV show as well as the 1978 Superman film.

Donald Trump’s recent pronouncement that he would not necessarily accept the results of the presidential election elicited an avalanche of angst across America. Such a move would threaten the very pillars of democracy that have been in effect for some 240 years. While Trump and his supporters will undoubtedly have feelings of disappointment, disillusionment, and anger if he loses (which is looking increasingly likely), challenging the outcome itself would be unprecedented. What would Donald Trump do if he were CEO of a biopharma company that had its drug rejected by the FDA?